Durham E-Theses Industrial restructuring and the State in Greece: national developments within an international setting Skrvelis, Efharis How to cite: Skrvelis, Efharis (1990) Industrial restructuring and the State in Greece: national developments within an international setting, Durham theses, Durham University. Available at Durham E-Theses Online: http://etheses.dur.ac.uk/6219/ Use policy The full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that: • a full bibliographic reference is made to the original source • a link is made to the metadata record in Durham E-Theses • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders. Please consult the full Durham E-Theses policy for further details. Academic Support Oce, Durham University, University Oce, Old Elvet, Durham DH1 3HP e-mail: [email protected] Tel: +44 0191 334 6107 http://etheses.dur.ac.uk 2 The copyright of this thesis rests with the author. No quotation from it should be published without his prior written consent and information derived from it should be acknowledged. Industrial Restructuring and the State in Greece; National Developments within an International Setting by Etharis Skarvelis A Thesis submitted in fulfillment of the requirements for the degree of Doctor of Philosophy Department of Sociology The University of Durham 1990 1 4 NOV 1991 Abstract The conceptual premise of the present thesis is that the international restruc­ turing of industrial capitalist production is actualized within specific national so­ cial contexts and at an individual enterprise level. A very fundamental dimension of the ongoing process of global integration of production is the way the national setting of the firm's operations reflects and adapts to the changing international environment. Within this framework, two central issues are being addressed: (a) How the national and international settings interact and interpenetrate at a firm level, and (b) What the mediating effect of the state is in this process as a regulator of the industrial crisis nationally. These issues are concretely explored in the case of the Greek state and its involve­ ment in the process of capitalist accumulation. The main argument of the thesis is that increasingly since the recession, and especially with the accentuation of the crisis in the 1980s, the Greek state has assumed the pivotal role in sustaining the nationally-based industries in their process of restructuring along lines defined by international developments. The empirical investigation exposes the ways in which the Greek state has crucially shaped this process through direct and indirect means of public sector intervention and through its subsidization policy for industrial and regional development. Case studies of individual firms highlight the ways in which the crisis of overaccumulation is experienced as an intensification of competition, and provide insights as to the variety of ways in which the nationally-based firm attempts to adjust and integrate to a changing international environment. Copyright © 1990 by Efbaris Skarvelis The copyright of this thesis rests with the author. No quotation from it should be published without Efbaris Skarvelis's prior written consent and information derived from it should be acknowledged. To My Parents Acknowledgements I wish to thank my supervisor, Prof. Huw Beynon, for his guidance, especially during the preliminary stages of the work, and for the detailed advice he offered on the presentation of fieldwork material. To Prof. Richard Brown I am grateful for his time spent reading and com­ menting on the thesis and for his support and assistance at a time when they were most needed. I am indebted to Dr P. Nikolopoulos, Director General of the National Library of Greece, for his help with research material and to Dr L. Nicolaou Smokovitis for her useful comments on the scope and subject matter of the research. I also wish to thank the following people who have assisted me in a number of ways during the period of my study: my colleagues at the department, especially Alex Afouxenidis, Iordanis Psimmenos, and Sally Ruane, whose interest in my work and day-to-day chit-chat helped alleviate some of the isolating aspects of the individual research project; Sally Ruane in particular, for her stylistic contributions to the thesis; Margaret Bell and Lynda Nurse, who have patiently aided me with a number of technical matters; George Tsifoutidis, for his much appreciated help with 'computer output transports'!; Marc Ireland, for expertise and advice on computer matters. Additionally, I wish to express my indebtedness to the numerous people who have directly or indirectly facilitated fieldwork. Finally and most importanly, the undertaking of this study would not have been possible at all were it not for the financial and moral support of my parents, to whom I wish to express my deepest gratitude for all the efforts they have unfailingly made on my behalf. Table of Contents Page Abstract Acknowledgements Table of Contents . 1 Code of Transliteration 5 List of Abbreviations 6 List of Tables . 8 Chapter 1: An Introductory Note 1.1 On Topical Issues of the Development-Restructuring Problematic 10 1.2 On the Frame, Focus, and Method of the Present Research ......... 21 Part I Industrial Development and the State in Post-War Greece Chapter 2: Phases and Features of Post-War Industrialization . 28 2.1 Greece and the 'Old' International Division of Labour ............... 30 2.2 From an Agricultural to an Industrializing Country ................. 34 2.2.1 1948-1963: The Reconstruction Period ....................... 35 2.2.2 1964-1974: The 'Economic Miracle' .......................... 42 2.3 Post-1974 Period: Crisis and Industrial Restructuring ............... 50 Chapter 3: State Industrial Development Policy; The Role of the Greek State in the Process of Capitalist Accumulation ........ 62 3.1 State Industrial Policy: The Issues Involved ......................... 62 3.2 The Formulation of a Policy in Favour of the Private Firm .......... 65 3.2.1 Private Initiative and the State ............................... 68 3.2.2 Subsidization of Private Investments: The State Incentives System ............................................ 70 1 3.3 The State-Industry Relation within a Changing Context ............. 81 3.3.1 New Aspects of State Industrial Policy ....................... 85 3.3.2 The Concepts of Dependency and Internationalization as Part of State Policy ....................................... 90 Part II Aspects of Sustained Restructuring Through Public Sector Intervention Chapter 4: State Subsidization through Infrastructure; The Case of the Public Power Corporation ................... 98 4.1 The Public Power Corporation as a State Monopoly and its Policy towards Manufacturing Industry ............... 99 4.2 The Manufacturing Firm in its Relation with the PPC ............. 116 4.2.1 Case Study One: Rendering the Investment Profitable ....... 116 4.2.2 Case Study Two: The Controversy Between Two State-Managed Firms ....................................... 123 Chapter 5: Problematic Firms; The Institutionalization of Sustained Restructuring ..................................... 129 5.1 The Phenomenon of Problematic Firms: Undertaking the Cost of Restructuring on Behalf of Private Capital ................ 130 5.2 Cases of Problematic Firms ........................................ 150 5.2.1 The Case of a Non-Viable Problematic: Sunlight SA ......... 152 5.2.2 The Case of a Viable Problematic: Piraiki-Patraiki SA ....... 161 Chapter 6: Public Sector Expansion in Manufacturing Industry ............. 174 6.1 New Tendencies in Public Sector Investment Policy: The State as Industrial Investor ............................. 174 6.2 Attempts at Industrial Planning and Restructuring: The Post-1975 Practice ..................................... 178 6.2.1 Breaking with the Post-War Tradition ....................... 178 2 6.2.2 Armaments Industry ........................................ 186 6.2.3 Petrochemicals .............................................. 189 6.2.4 Shipbuilding ................................................ 192 6.2.5 The Mining-Metallurgical Industry .......................... 197 6.3 The Role of State Investments ..................................... 205 Part III Restructuring as Regional Development on the Basis of State Subsidies for Private Capital Chapter 7: Industrial Development, the Region, and the State .............. 208 7.1 Industrial Development and the Spatial Distribution of Industry .... 209 7.2 Regional Aspects of the State Subsidization Policy for Industrial Development .................................. 214 7.3 The Case Study of a Region: Industrialization and Deindustrialization in Xanthi ................................................... 222 7.3.1 Xanthi's Peripherality as an Agricultural Region ............. 222 7.3.2 The Development of Industry in Xanthi ..................... 229 Chapter 8: Subsidized Investments in Xanthi ............................... 239 8.1 The Subsidies Scheme: Effects and Prospects ...................... 239 8.2 The Industrial Firm in Xanthi: Aspects of National and International Integration ................................ 249 8.2.1 Garment Firms ............................................. 250 8.2.2 Tobacco-Cigarette